The epidemic, a black swan , has disrupted all plans. The Russia-Ukraine war has made the economy even worse. Prices in many industries have been fluctuating. Lubricating oil prices have been adjusted by 10 points or 20 points. After half a year, The ex-factory price of lubricating oil has been increased by nearly half. In addition to these superficial phenomena, we should actually make these preparations in business:
1, streamlined products
In the past, the more products, the more groups covered, multi-brand, Multi-series has become the strategy of almost all lubricant companies. In the past two years, it has been packaged as "precision oil use" to increase profits through the concept. However, with more products, more packaging materials are needed, and each packaging material is in stock. , some companies’ packaging material expenses can account for more than 10% of annual sales. Normally, it's fine. Frequent ordering in multiple batches can reduce financial pressure. However, under the epidemic, logistics has been blocked and raw materials have fluctuated. Some companies are faced with the embarrassment of having nothing to cook without rice. For a Tianjin company, the original anti-counterfeiting sealing aluminum foil was out of stock and no longer available. There is no need to substitute products; the more product lines there are, the more complex the base oils and additives used will be, and it is easier for quality fluctuations to occur. If there are fewer products, there will be no similar troubles. Streamlining products or even creating larger items not only reduces peripheral costs, but also improves quality.
2, Optimize upstream
The epidemics in the previous two years were only short-term quarantines, but this round of epidemics in Shanghai and Suzhou were in a state of shutdown for three months. Raw materials could not be transported in, and inventories were released. Mobil, Fox, Lubricant blending plants such as , Kunlun , and Dalian had to stop operations. Lubricant blending requires a variety of raw materials, each of which is indispensable. Enterprises have no choice but to use alternative solutions. Many people say: the current engine oil is not as good as the engine oil a few years ago. Although the grade of engine oil continues to improve, the use experience has not improved qualitatively. If you want to truly gain user recognition, you need to optimize the formula and improve the internal quality. A factory in Shanghai had additives but was out of Category III base oils, and was anxiously waiting to start work; a company in Zhengzhou used metal cans and packaging, and the supplier's production was hindered. However, even if the quality was at the same level, it was not available for a while. Difficult to implement. In the future, suppliers must have an alternative or backup solution that can be supplemented at any time.
3. Avoid out-of-stocks
Out-of-stocks have become an unavoidable phenomenon for lubricant companies in recent years. Short-term out-of-stocks will have no impact, but long-term out-of-stocks will be an unbearable burden for the company. A lubricant company in Wuhan that sells oil for one year had its factory shut down for half a year in 2020. People could not get out or get in. The upstream and downstream of the production chain were all around Wuhan, and no relevant backups were made. After the shutdown, there was no replacement at all. Plan, for more than half a year, dealers and major customers will need engine oil and will not wait for you. After the dealer changes the brand, in order to maintain market stability, it will not change the brand easily. Now, the company's sales have dropped off a cliff. Annual sales volume is less than 30% of the peak period. A company in Kunshan has stopped operations, but it has an old factory in Shenyang, which can be replaced at any time; the same Jiurun lubricating oil has three factories in Shanghai, Zhengzhou and Luoyang , and it has sufficient anti-risk capabilities . The possibility of a complete stockout is almost non-existent.
4. Cooperation with peers
Peers are both opponents and teammates. After Shanghai Bo Ubian's lubricant company suspended operations, some companies with branch factories, such as Mobil, Volkswagen, and Kunlun, were slightly affected; but companies with only one production base such as Shengpai and Torch were faced with Facing unprecedented challenges, a certain company originally thought that "staticization" would be short-term, but after a month, it had to urgently find a foundry. However, it was also a foundry itself and had never considered cooperating with its peers before. No matter who to look for, no corresponding guarantee system has been established in terms of molds, packaging materials, logistics, and formulas. Although partners have been contacted, there is no way to get along in the short term, and some OEM customers have fled. In order to operate steadily, any blending factory needs to maintain a good relationship with its peers. Maybe one day they will need to help each other. At least there will be one cooperative factory in the north and the south, and emergency plans must be established on a daily basis.
5. Channel sinking
Most lubricant brands adopt the traditional channel model. In order to enhance competitiveness, the channel scope has gradually moved from the national, provincial, and municipal levels to the county level. The reduction of links has increased the profit margin of the channel. , nowadays, a brand does not have 20 points of gross profit space, and dealers are unprofitable. Unless it is a well-known big brand, it can gain profits through huge sales, but this also reduces it to a "porter"; with the e-commerce , the rise of chain stores, they relied on their scale advantages to downgrade lubricants from profit products to "drainage products" and continuously lowered the high prices. SN fully synthetic engine oil has been lowered to 59, and SP can also reach the price of 79. Tu The sales of oil and water in the Year of the Tiger exceeded 3 billion, which shows the power of price. Traditional channels are unable to compete. The only way is to cancel the channels and go directly to the terminal. The direct supply terminal does not allow companies or brands to operate the market like agents, but to quickly establish a network from point to point, but it is not an oil change center, nor is it a chain.
6, price shopping
Starting from 2018, the lubricant industry has entered a downward trend. It is predicted that lubricant consumption may fall to less than 4.5 million tons in 2022, which is 30% lower than the peak of 6.8 million tons. The bigger the brand, the more pressure it faces to maintain its share. If the profit is lost, it can be earned back in the future, but if the sales volume is gone, it is gone. Big brands "would rather give up profits than sales volume", although the cost of lubricants has increased. 20% to 40%, but the retail price of lubricants has not been raised, but has been lowered. A typical example is Shell Heineken Red. When it was SG grade 22 years ago, it sold for 80, but now after upgrading to SN, it is actually 78; unified The Jing maintenance customized SP level is priced at only 79. In the future, with the increase in the proportion of new energy vehicles and the extension of engine oil change intervals, lubricant consumption will continue to decline. The cake is limited and the price war will continue undeclared.
7. E-commerce plus code
Before 2020, Keduomei also said that e-commerce sales were strictly prohibited, but then it started to slap in the face. It has built flagship stores on JD.com and Tmall . Not only are the prices affordable, but there are also various Various activities come in, including , Douyin, , Kuaishou, and live streaming to bring goods. On the contrary, some domestic companies have gone too far. For example, Zero Kilometers still declares as a power generator that at present, only brands such as Compton, Zero Kilometers, Great Wall , Liqi Moly and other brands attach great importance to e-commerce channels. In order to avoid mutual interference between online and offline, most companies launch customized e-commerce models, such as Total, Fox, and Great Wall. In addition to regular products, Keduomei also launches corresponding e-commerce models. Mobil's " "I want to be quiet", Fox's "Qing" series, Great Wall's "Gourmet", Shell's "Forbidden City, Landscape, Nature" series, etc., and some directly customized "Beijing maintenance" models, such as Kunlun, Tongyi, etc. In the future, with the improvement of the maintenance network system, can buy oil online and change oil offline, more and more people will accept .
8. Doing self-media
The epidemic has caused exhibitions and conferences to be continuously postponed or even canceled. Even the Canton Fair is held online. It is difficult to determine the dates for the Auto Parts Fair, BMW Exhibition, Oil Products Exhibition, and Yasen Exhibition. Even if the exhibition can be held, The number of visitors is also becoming increasingly rare, and it has become a fact that there are more exhibitors than visitors. How to promote the brand? There are already more and more channels, from WeChat and Weibo in the past to Douyin and Kuaishou now, live streaming has been chosen by more and more companies, especially the launch of WeChat video accounts and live streaming accounts. Easy to organize and implement. Through self-media, users are constantly pushed down their own private domain boundaries. Before 2020, Shell’s news views were generally a few thousand, but now, they are often tens of thousands. The brand is getting closer and closer to users. There is momentum for overhead channels. But what cannot ignore is the construction of the official website. Self-media is fragmented . Only through the official website can a complete image of the brand be pieced together.
9. Co-branded
Although prices are rising, in recent years, fewer and fewer brands with annual sales of 100 million yuan have emerged. First, e-commerce prices serve as benchmarks. The bigger the brand, the less profit dealers have, so they have to build Private brands; second, channel costs are getting higher and higher, new brands lack competitiveness, and sales are difficult to increase quickly. Terminal stores are faced with the dilemma of fewer vehicles entering the market and lower bicycle consumption. In this case, brands are becoming more and more It is difficult to grow bigger, especially in a declining industry. The sales of big brands have declined. For listed companies, Compton’s sales have been hovering around 900 million since its listing. Longpan’s oil sales in the past two years have also been 700 million. Fluctuating left and right, Hi-tech Petrochemical has declined, with annual sales of around 2.3 billion for a few years. If you want to achieve a market breakthrough, you must rely on external forces and cooperate with customers with channels. Joint brands and channel customization have begun to rise, which not only reduces cross-selling, but also It can increase partners’ profits and lock in sales.
In addition to these general directions, OEM and capital cooperation will also become trends, but we must know that unemployment, declining income, reduced loan and savings capabilities have led to a reduction in the willingness of many consumers to consume, so-called retaliatory consumption It will not exist, but the consumption downgrade is actually visible: the sales of new energy vehicles have increased sharply, the price of engine oil channels has increased, and the retail price has fallen instead of rising, which all shows that the market's affordability is seriously declining, Starbucks' performance in the second quarter of 2022 has declined 14 %, while Starbucks, which takes the civilian route, grew by 89%.
Are you ready for market competition? Under low prices and low profits, only by reducing costs and increasing efficiency can the company remain evergreen.
5. Channel sinking
Most lubricant brands adopt the traditional channel model. In order to enhance competitiveness, the channel scope has gradually moved from the national, provincial, and municipal levels to the county level. The reduction of links has increased the profit margin of the channel. , nowadays, a brand does not have 20 points of gross profit space, and dealers are unprofitable. Unless it is a well-known big brand, it can gain profits through huge sales, but this also reduces it to a "porter"; with the e-commerce , the rise of chain stores, they relied on their scale advantages to downgrade lubricants from profit products to "drainage products" and continuously lowered the high prices. SN fully synthetic engine oil has been lowered to 59, and SP can also reach the price of 79. Tu The sales of oil and water in the Year of the Tiger exceeded 3 billion, which shows the power of price. Traditional channels are unable to compete. The only way is to cancel the channels and go directly to the terminal. The direct supply terminal does not allow companies or brands to operate the market like agents, but to quickly establish a network from point to point, but it is not an oil change center, nor is it a chain.
6, price shopping
Starting from 2018, the lubricant industry has entered a downward trend. It is predicted that lubricant consumption may fall to less than 4.5 million tons in 2022, which is 30% lower than the peak of 6.8 million tons. The bigger the brand, the more pressure it faces to maintain its share. If the profit is lost, it can be earned back in the future, but if the sales volume is gone, it is gone. Big brands "would rather give up profits than sales volume", although the cost of lubricants has increased. 20% to 40%, but the retail price of lubricants has not been raised, but has been lowered. A typical example is Shell Heineken Red. When it was SG grade 22 years ago, it sold for 80, but now after upgrading to SN, it is actually 78; unified The Jing maintenance customized SP level is priced at only 79. In the future, with the increase in the proportion of new energy vehicles and the extension of engine oil change intervals, lubricant consumption will continue to decline. The cake is limited and the price war will continue undeclared.
7. E-commerce plus code
Before 2020, Keduomei also said that e-commerce sales were strictly prohibited, but then it started to slap in the face. It has built flagship stores on JD.com and Tmall . Not only are the prices affordable, but there are also various Various activities come in, including , Douyin, , Kuaishou, and live streaming to bring goods. On the contrary, some domestic companies have gone too far. For example, Zero Kilometers still declares as a power generator that at present, only brands such as Compton, Zero Kilometers, Great Wall , Liqi Moly and other brands attach great importance to e-commerce channels. In order to avoid mutual interference between online and offline, most companies launch customized e-commerce models, such as Total, Fox, and Great Wall. In addition to regular products, Keduomei also launches corresponding e-commerce models. Mobil's " "I want to be quiet", Fox's "Qing" series, Great Wall's "Gourmet", Shell's "Forbidden City, Landscape, Nature" series, etc., and some directly customized "Beijing maintenance" models, such as Kunlun, Tongyi, etc. In the future, with the improvement of the maintenance network system, can buy oil online and change oil offline, more and more people will accept .
8. Doing self-media
The epidemic has caused exhibitions and conferences to be continuously postponed or even canceled. Even the Canton Fair is held online. It is difficult to determine the dates for the Auto Parts Fair, BMW Exhibition, Oil Products Exhibition, and Yasen Exhibition. Even if the exhibition can be held, The number of visitors is also becoming increasingly rare, and it has become a fact that there are more exhibitors than visitors. How to promote the brand? There are already more and more channels, from WeChat and Weibo in the past to Douyin and Kuaishou now, live streaming has been chosen by more and more companies, especially the launch of WeChat video accounts and live streaming accounts. Easy to organize and implement. Through self-media, users are constantly pushed down their own private domain boundaries. Before 2020, Shell’s news views were generally a few thousand, but now, they are often tens of thousands. The brand is getting closer and closer to users. There is momentum for overhead channels. But what cannot ignore is the construction of the official website. Self-media is fragmented . Only through the official website can a complete image of the brand be pieced together.
9. Co-branded
Although prices are rising, in recent years, fewer and fewer brands with annual sales of 100 million yuan have emerged. First, e-commerce prices serve as benchmarks. The bigger the brand, the less profit dealers have, so they have to build Private brands; second, channel costs are getting higher and higher, new brands lack competitiveness, and sales are difficult to increase quickly. Terminal stores are faced with the dilemma of fewer vehicles entering the market and lower bicycle consumption. In this case, brands are becoming more and more It is difficult to grow bigger, especially in a declining industry. The sales of big brands have declined. For listed companies, Compton’s sales have been hovering around 900 million since its listing. Longpan’s oil sales in the past two years have also been 700 million. Fluctuating left and right, Hi-tech Petrochemical has declined, with annual sales of around 2.3 billion for a few years. If you want to achieve a market breakthrough, you must rely on external forces and cooperate with customers with channels. Joint brands and channel customization have begun to rise, which not only reduces cross-selling, but also It can increase partners’ profits and lock in sales.
In addition to these general directions, OEM and capital cooperation will also become trends, but we must know that unemployment, declining income, reduced loan and savings capabilities have led to a reduction in the willingness of many consumers to consume, so-called retaliatory consumption It will not exist, but the consumption downgrade is actually visible: the sales of new energy vehicles have increased sharply, the price of engine oil channels has increased, and the retail price has fallen instead of rising, which all shows that the market's affordability is seriously declining, Starbucks' performance in the second quarter of 2022 has declined 14 %, while Starbucks, which takes the civilian route, grew by 89%.
Are you ready for market competition? Under low prices and low profits, only by reducing costs and increasing efficiency can the company remain evergreen.
